Материал: Management-and-Organization-Behavior

of the environment – technologists, economic, socio-cultural and political – Indian industry has to unlearn its older practices and prepare itself to meet

the challenges. To quote Peter Drucker, “in turbulent times, an enterprise has to be managed both to withstand sudden blows and to avail itself of

sudden unexpected opportunities”. As such the need for entrepreneurial managers with innovative outlook who always search for change, respond to it, and exploit it as an opportunity is now greater than ever before. They are the ones who make a difference, while ordinary managers are effective only in managing stable, routine and cost-effective business.

Characteristics of Entrepreneurial Managers

Let us, in this context, understand the psychological attributes that characterize entrepreneurial managers. In brief they are:

-- Have high activeness;

-- Posses an idea or a distinct way of doing things; -- Show greater openness to experience;

-- Have a more internal focus of evaluation;

-- Have a tendency to toy with elements and concepts; -- Are willing to take risks; and therefore

-- Need greater psychological and autonomy.

Fostering Entrepreneurial spirit

Fostering entrepreneurial spirit in organizations is no easy task. For that, organizations must be managed differently so that they become fertile grounds for new product ideas. Creation of such a congenial climate depends on the ability of the top management to redefine the following organizational parameters.

Structure

If necessary, modifications have to be effected in the structure of the organization so as to minimize the rigidities and complexities. All the bureaucratic tendencies have to be avoided. Structures with too many levels reduce the organization’s ability for timely response. Hence the trend now is towards simple and flat structures.

Following are some of the structural modifications which gained wider acceptance in the recent times to foster entrepreneurship in the existing business.

-- wider span of control with fewer levels. This facilitates faster decision making because new ideas and proposals need not be scrutinized or pass through too many levels;

-- Creation of autonomous units to try new product ideas. This is often described as creating ‘companies within companies’;

-- Job descriptions are made less detailed unlike in the traditional structures;

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-- Controls are loose rather than tight; for, too many controls stifle entrepreneurial spirit of the people.

--

Strategy

In a dynamic environment, companies that lack foresight are easily prone to become former leaders for the simple reason that they fail to adopt to retain their leadership. Business history is fully replete with such leader-to- loser stories. It has also been amply proved in several studies that the leading cause for the company’s failure is the top management’s obsession with

current operations giving credence to the philosophy that ‘existing products

drive out new products rather than the other way round’. The direction of the strategy in which the organizational resources are deployed should centre on innovation. The choice of the right strategy dictates the fortunes of the company.

Organizational Culture

Culture, in the organizational context, refers to a set of values, dominant beliefs and the guiding norms shared by the members of the organisation. A good value system with internal harmony widely diffused and shared throughout the organisation would help induce entrepreneurial spirit. On the other hand, a confused value system with internal disharmony, poor work ethics and weak morale mars the spirit.

The following measures help to foster conducive culture within the organisation to breed and nurture entrepreneurialism.

-- Strong commitment and support of the top management for innovation;

-- Adequate freedom for the organizational members by pushing down autonomy for down the line;

-- Tolerance for failure to boost up the morale, for new product ideas, as Peter Drucker points out, is like “frog’s eggs”. Of the thousands hatched, only a few survive. No individual in the organisation volunteers to experiment with new ideas, if failure involves career risks;

-- Adequate reward systems to motivate innovative people through various reinforcing devices. In the west, lavish banquets are frequently organized to honour the champions, in addition to promotions, incentives by way of stock options, bonus, etc,

To sum up, entrepreneurship within the existing business involves identifying new opportunities and steering the organisation towards the development of new products and services. The entrepreneurial activities in the existing business as such collectively called ‘corporate entrepreneurship’ or ‘intrapreneurship’. Barriers to entrepreneurship include the lack of ideas, market knowledge, general business know-how, lack of appropriate strategy, etc.

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Review Questions

1.Explain the importance of creativity in the organizational context.

2.Discuss the process of creativity and the important steps to be taken to develop new products and services.

3.Analyse the various measures to promote innovative spirit in the organizations. Also describe the factors that stifle innovation.

4.How is entrepreneurship different from managership? Make a logical presentation of what you understand about entrepreneurship in the existing business.

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Lesson – 29 : Benchmarking

Objectives

After reading this lesson, you should be able to:

ӹӹUnderstand The Concept And Evolution Of Benchmarking As A Quality Improvement Tool ;

ӹӹTo Know The Advantages And Limitations Of Benchmarking; And

ӹӹTo Equip With The Skills Required For Installing Benchmarking Practices.

Lesson Outline

ӹӹEvolution Of Benchmarking

ӹӹAdvantages Of Benchmarking

ӹӹLimitations Of Benchmarking

ӹӹPitfalls Of Benchmarking

ӹӹApproaches Of Benchmarking

ӹӹTypes Of Benchmarking

ӹӹPhases Of Benchmarking

ӹӹReview Questions

Benchmarking is a systematic method by which organizations can measure themselves against the best industry practices. Benchmarking is the search for best practices that will lead to superior performance. Benchmarking helps a company learn its strengths and weaknesses and those of other industrial leaders and incorporate the best practices into its own operations. It promotes superior performance by providing an organized framework through which

organizations can learn how the “best-in-class” do things, understand how these best practices differ from their own and implement changes to close the gap. It is a tool for continuous improvement.

Benchmarking is defined as “measuring our performance against that of best-in-class companies, determining how the best-in-class achieve those performance levels and using the information as a basis for our own company’s targets, strategies and implementation.” Or more simply, “the

search of industry best practices that lead to superior performance”. The term “best practices” refers to the approaches that produce exceptional results, which are usually innovative in terms of the use of technology or human resources and are recognized by customers or industry experts.

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What is a benchmark? : A benchmark is a point of reference against which things are measured. In business, these points of reference or standards can take many forms. They are measured by questions about the product or service (e.g. how many, how much time, how much money, how reliable or how well it is made of?). By studying other organizations and comparing the answers to these questions, we will be able to measure our performance against that of others.

As a result, you will be able to set new goals and adapt the best practices for your organization. This, in turn, will help satisfy your customers with the best quality, cost, product and service.

Evolution of the concept of Benchmarking

The concept of benchmarking is not new. In the early 1800s, Francis Lowell, a New England industrialist traveled to England to study manufacturing techniques at the best British factories. Henry Ford created the assembly line after taking tour of a Chicago slaughterhouse and watching carcasses hung on hooks mounted on a monorail move from one workstation to another. Toyota’s just-in-time production system was influenced by the replenishment practices of U.S. supermarkets. Modern benchmarking was initiated by Xerox (in the 1980s), an eventual winner of the Malcolm Balridge National Quality Award for quality. IBM, Motorola and Xerox became the pioneers in instituting the benchmarking processes. Xerox initially studied their direct competitors and discovered that:

-- their unit manufacturing cost equalled the Japanese selling price in the United States.

-- the number of production suppliers was nine times that of the best companies.

-- assembly line rejects were 10 times higher. -- product lead times were twice as long, and

-- defects per hundred machines were seven times higher.

These results helped them to understand the amount of change that would be required to set targets to all the functional areas of the business.

Advantages of Benchmarking

-- Benchmarking promotes a thorough understanding of the company’s own process i.e., the company’s current profile (strengths and weaknesses) is well understood.

-- Benchmarking process involves imitation and adaptation of the practices of superior competitors, rather than invention, thereby saving time and money for the company practicing benchmarking.

-- Intensive studies of existing practices often lead to identification of non-value-added activities and plans for process improvement.

-- Benchmarking enables comparison of performance measures in

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